And there’s no shortage of bears predicting that such a recurrence is in store. They have their compelling arguments, to be sure. A post-election U.S. faces a “fiscal cliff” akin to the manufactured default scare by which Congressional Republicans tried to force President Barack Obama to make massive spending cuts. There’s the underwhelming U.S. economic recovery that may cost Obama his job. And there’s a Euro-crisis that stubbornly defies resolution.

If Washington gridlock does culminate in another default panic, or U.S. GDP and employment growth figures go from anemic to negative, or if Greece is booted from — or quits — the Eurozone, watch for a market freefall of epic proportions, the bears warn.

Funny thing, though: you rarely hear about the aftermath of the fabled Crash of ’87. It doesn’t fit the dramatic storyline that financial journalism and “permabear” analysts thrive on. Which is that the markets recovered, quickly and powerfully.

More to the point, they did so again after the Russian default panic and Asian currency crises of the following decade. And again after the calamitous implosion of dot-com and telecom stocks in the early 2000s, coinciding with a white-collar crime wave among balance-sheet fabulists at Enron Corp., Nortel Networks Corp., Tyco International Inc., Adelphia Communications Corp. and so on.

For that matter, the stomach-churning drop of about 40 per cent in North American equities in the opening act of the Great Recession, in 2008-09, has become a similar non-event for long- and even medium-term investors, given the speed with which markets have recovered.

In fact, amid all the world’s political and economic woes, the Standard & Poor’s 500 Index, the broadest measure of market performance, has this year outperformed every other major asset class. So far this year the S&P 500 has gained 14 per cent, ahead of U.S. Treasuries (up 3.3 per cent), triple-A corporate bonds (9.9 per cent), the S&P commodities index (1.7 per cent) and the greenback (down 0.7 per cent).

Bears insist that post-election Washington brinkmanship over the budget will send stocks reeling. Or that the Federal Reserve Board will suspend its economic booster shots. Or that the European Union, an economic region a bit larger than the U.S., will disintegrate with chaotic results.

A jarring single-session market plunge “could happen at any time,” Hulbert cautions. “That’s why you always have to prepare for it, because you don’t know when it will occur.”

Actually, every previous major market reversal has been widely warned of, in time to dump your Red Rocket Resources and stash the proceeds under the pillow. It’s just that stubborn believers would not allow their faith to be shaken.

It’s like that now, only in reverse. In miserable times, “the negative case is always more compelling,” U.S. money manager Laszlo Birinyi told Bloomberg News last week, citing an age-old truism. “It’s always more rational because the negative case is about now. The stock market is about tomorrow.”

So, in today’s uncertain global economy, it matters little to bearish investors that amid the weakest U.S. recovery since World War II, the profits of S&P 500 companies are forecast to rise yet another 4.7 per cent by year’s end, a record high. And that the S&P’s impressive gains this year have been overshadowed by a 25 jump in Germany’s dominant DAX Index and, wait for it, a 28 per cent gain in the Athens Stock Exchange General Index.

One doesn’t want to be irrationally exuberant, but the worrisome factors cited here suggest a rather conspicuous upside. One thing about recessions, they always end. Which makes selected high-quality stocks purchased for the long term a buying opportunity at today’s relatively modest prices.

Today’s skittish market is poised for a worst-case scenario in which everything goes wrong. And understandably so, given that memories are still fresh of the many things that did go wrong, and could go wingy again. That explains everything from the temerity of employers sitting on billions of dollars of idle cash, fearing a repeat of the 2008 global credit crunch, to cautious consumers and to investors waiting for some kind of all-clear signal. Even if history tells us that when the all-clear does sound, the smart money has already, you know, bought low and is poised to sell high. To you.

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